PETE WILLIAMS, HOST: American Paul Johnson Jr. was murdered today by an al Qaeda terrorist group in Saudi Arabia. And tonight U.S. officials confirm that the leader of the group that claimed responsibility for the murder was himself killed by Saudi forces while disposing of Johnson‘s body.

Al Qaeda terrorists have beheaded Paul Johnson Jr., the American held hostage in Saudi Arabia. That makes him the third American killed in Saudi Arabia in the past 10 days. And his body has been found in the Saudi capital of Riyadh.

U.S. officials have confirmed that Saudi security forces have now killed Abdul Aziz al-Muqrin, the leader of al Qaeda in the Arabian Peninsula while he was disposing of Johnson‘s body.

We begin tonight with Khaled al-Maena, the editor-in-chief of “Arab News,” on the phone now from Jiddah, Saudi Arabia.

Good evening to you. What is the latest that you can tell us about this shootout?

KHALED AL-MAENA, EDITOR-IN-CHIEF, “ARAB NEWS”: When the security forces were chasing the terrorists and caught up with them, there was a shoot out. And they killed al-Muqrin, who is the leader of the murderous cult, and two others.

WILLIAMS: And is it clear what the circumstances were? Is it your understanding that he was caught literally himself trying to dispose of Mr. Johnson‘s body?

AL-MAENA: Well, I think there was a chase. We don‘t exactly know whether he was caught with the body. But we do know and can confirm that it happened a couple of hours after the web site posted those pictures. So it was part of an ongoing operation.

In fact, when I was in Riyadh yesterday, there were helicopters hovering about. Police were checking—a large number of security personnel were checking I.D.‘s. There were roadblocks. So I‘m not surprised that he was caught, because the dragnet was literally stretched.

WILLIAMS: And from what you know, has this siege continued? Or has the shooting stopped?

AL-MAENA: Well, it has stopped. It was a brief shootout. But the Saudi authorities are relentless in their pursuit of these people. I think this operation will go until the last person is found out and brought to justice.

These things have been going on for some time. They‘re damaging the Saudi reputation and image. And I think the authorities will not stop now, because there are still remnants of the other cells that have to be weeded out.

WILLIAMS: And Mr. Maena, what can you tell us about how the Saudis, what we would call the man in the street, is reacting to the killing of this American?

AL-MAENA: Well, it has been shock and anguish. And in fact, when I was in Riyadh yesterday, people were very tense. And back in Jiddah, when people heard about this killing, or rather beheading, they were in great shock. There were tears.

In fact, somebody called me, a friend of Mr. Johnson. And he was in the Saudi‘s territory. And we don‘t want that. Mr. Johnson was a guest in this country. He came here to help us develop our forces. And it‘s unfortunate.

But the people by and large, the overwhelming majority of the people -

· We have people spread out in the streets asking. And everybody is in a state of shock. It‘s a very sad night here in Saudi Arabia.

WILLIAMS: And finally, is the appeal of al Qaeda, is it diminishing or is it growing?

AL-MAENA: Well, it was akin to only a few people, I think, or a small segment. The majority of the people are against al Qaeda. They‘re against the killing of people. And I think it will diminish more, because people don‘t want to see bloodshed.

And this is a society which is a peaceful society. And to have political murders and political bombings and killings is alien to our philosophy of life. And I think people are happy. And we do hope that the al Qaeda messages will no longer be heeded by anyone.

WILLIAMS: Mr. Maena, thank you very much. Khaled al-Maena, joining us by the telephone.

The murder of Paul Johnson has been covered extensively by the Arab language television networks of the Middle East. Here is how the story was reported earlier today on al-Jazeera Television, based in Qatar.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (through translator): The abductors have carried out their threat and killed the American, Paul Marshall, who was in their custody since last Saturday.

The killing came after a deadline of three days, given to the Saudi government to release some of al Qaeda members in return for not killing the hostage.

The abductors have said, in their statement, that they have killed the hostage to revenge what happened in Guantanamo and Abu Ghraib prisons.

According to the statement posted on the pictures on the Web site, it shows graphics of what they said were of the American hostage who was working as an Apache helicopter maintenance engineer.

The killing of the hostage came after repeated calls from his family and calls from the imams in Saudi Arabia to release him, the latest of which came from the imam of the great Muslim Mecca, who asked not to harm non-Muslims in the kingdom.

The Saudi decision not to negotiate with the abductors was politically understood as not setting an example for future abductions. As for their inability to free him, in any way possible, as an additional burden to the Saudi authority, there is fighting, a violent wave of multiple targets of economic to assassination of leaders to the abduction operations that end in killing.

WILLIAMS: So it‘s all been fairly recent developments. It‘s just starting to soak in over there. For reaction throughout the Arab world, we‘re turned now to Charlene Gubash, who is the NBC bureau chief in Cairo, Egypt.

Charlene, what are people saying about this elsewhere throughout the Arab world?

CHARLENE GUBASH, NBC NEWS CAIRO BUREAU CHIEF: Hello, Pete.

In Egypt, they are horrified by the idea of a hostage taking and threatening to kill someone. It‘s about 2 here at night now. So not many people are aware that he has been beheaded. But when there have been similar incidents, with Mr. Berg, for example, people are horrified by the attack.

But at the same time, they all tell you that they understand where this anger comes from because of what‘s happening in Iraq, because of what‘s happening in Afghanistan. People feel like Islam is under siege.

And so this is why they feel these people have this pent-up anger. They‘re not justifying the attacks, but at the same time, they see why people like this commit these kind of acts. So that‘s kind of the general sentiment here and what is expected tomorrow.

WILLIAMS: Do they in any sense blame the conditions in Saudi Arabia?

Or do they think the same thing could happen anywhere, in Egypt?

GUBASH: Well, Egypt was the site of terrorism from the early 1990‘s. And one, in part because they use great—exerted great pressure against the terrorist elements and the terrorist cells. And also because, after the Luxor (ph) massacre, the Egyptian people themselves were so outraged that they started refusing to give support, moral and material, to these cells.

So in Egypt, I think they feel fairly secure. There are other countries in the Arab world such as Kuwait that are—where these kind of things are more likely to happen.

They have thousands of American troops there. Thousands of American personnel and contractors coming in, staying in hotels, living on the base. And they also have a strong Islamist element in the parliament itself. Although they‘re moderate fundamentalists, that tendency still exists and there have been attacks on American personnel in Kuwait before. So that‘s probably a more likely target for terrorism.

WILLIAMS: This man, al-Muqrin, who was supposedly behind this and has now been shot, was once convicted of, in Ethiopia, trying to kill Hosni Mubarak. Are their feelings in Egypt about him?

GUBASH: Well, in Egypt they—they hate all of these guys. And they would like to see them all brought to justice. And they‘ve been trying to get them extradited from various countries across the world. So they will be very happy, very pleased indeed, to see that he has—that he has been killed.

WILLIAMS: All right. Thank you very much. Charlene Gubash, who is the NBC News bureau chief in Cairo.

More now on Abdul Aziz al-Muqrin, who is the al Qaeda leader and supposedly the mastermind behind the kidnapping and murder of Paul Johnson.

NBC‘s senior investigative correspondent, Lisa Myers, tells us more.

(BEGIN VIDEOTAPE)

LISA MYERS, NBC NEWS CORRESPONDENT (voice-over): Al Qaeda cell in Saudi Arabia signaled this new strategy in late March when its leader, Abdul Aziz al-Muqrin, posted this military handbook on the Internet, urging terrorists to start targeting individuals and listing preferred human targets.

Since May 1, Johnson is one of 15 westerners murdered or kidnapped and murdered. The last three, including Robert Jacobs, were American military contractors.

Many recent al Qaeda killings are especially savage, throats being slit or beheadings.

STEVE EMERSON, MSNBC TERRORISM ANALYST: I cannot imagine a more terrifying, frightening image, of someone getting executed by having their throat slit or their head decapitated. And the terrorists know this.

MYERS: Ironically, al-Muqrin, who was reportedly killed today, had been released from a Saudi jail shortly before 9/11 for, quote, “good behavior.”

Today U.S. intelligence called him one of the most ruthless, cold-blooded killers in al Qaeda. And he had taken dead aim at the Saudi regime.

In a chilling Internet posting obtained by NBC News, a terrorist describes this recent rampage to a Saudi housing complex, murdering only non-Muslims. Quote, “Brother Nimr cut off his head and put it at the gate of the building so that it would be seen by all those entering and exiting.” All part of the strategy.

EVAN KOHLMANN, TERRORISM CONSULTANT: By throwing fear into their hearts, by executing them one by one if necessary, this is what will drive Westerners out of the Middle East.

MYERS: The new tactics show al Qaeda is adapting, hitting softer targets and by targeting individual Westerners, there is less chance of alienating the Saudi population, which was upset when Muslims were killed in previous bombings.

Lisa Myers, NBC News, Washington.

(END VIDEOTAPE)

WILLIAMS: General Wayne Downing knows about terrorist attacks on Americans in Saudi Arabia. He was given the assignment of assessing the 1996 bombing of Khobar Towers there and to make recommendations on how to protect Americans and American facilities worldwide from terrorist attacks. And he also served as a member of the National Commission on Terrorism fro ‘99 to 2000. He‘s now an MSNBC military analyst, and he joins us now.

General Downing, what is going on in Saudi Arabia? Is this a sign that the Saudis are losing control? Or is this an isolated incident?

GEN. WAYNE DOWNING, U.S. ARMY (RET.): No, Pete, I definitely don‘t think it‘s an isolated incident. The security situation in Saudi Arabia has been steadily deteriorating over the past 18 months.

You know, previous to 9/11, Saudi Arabia was always considered to be one of the safest places in the Middle East in which to live and to work for a Westerner. That has really, really changed, as we‘ve seen.

You know, the statistic that you just quoted, 15 people killed in the last, you know, basically six or seven weeks over there. It‘s very dangerous, Pete, and it‘s going to continue to be dangerous. We‘re going to have assassinations, kidnappings and more of these executions.

WILLIAMS: Were you surprised that these al Qaeda terrorists followed through on their threat to commit murder?

DOWNING: No, Pete. I was not at all surprised. My condolences to the Johnson family. I know it‘s a very, very difficult period of time for them. But no, I was certain that they would follow through.

WILLIAMS: Why?

DOWNING: I thought the only way that we were going to get Johnson out of there would be a successful location of that group and a raid. I mean, these—these guys are serious.

WILLIAMS: Just because of their past history?

DOWNING: Yes, Pete. I mean, they want to make a statement. And believe me, they got much more of a statement with this execution than they would have, even had the Saudis decided to do something trading with them.

I think this is what they wanted. They want more of this. Despite some of the things you hear, this plays very, very well in parts of the Islamic world, not just the Arab world but the Islamic world.

The effect of Abu Ghraib, the effect of our operations in Iraq, and Afghanistan have certainly made many, many people in those regions very, very upset with us. And many of the people are very happy with these kinds of actions that you see going on.

WILLIAMS: All right, General. Many more questions for you, and we‘ll be joined when we come back by terrorism expert M.J. Gohel from London on whether Saudi Arabia is doing enough to safeguard American workers from attacks.

WILLIAMS: In a moment, is al Qaeda‘s new attack plan to kidnap and kill Americans in the Middle East? We‘ll talk to two terrorism analysts when HARDBALL returns.

(COMMERCIAL BREAK)

WILLIAMS: Welcome back to HARDBALL. We‘re back with General Wayne Downing and joined now by M.J. Gohel, who runs the Asia Pacific Foundation, an independent security assessment company in London and someone we have turned to frequently because he knows so much about the world of terrorism.

Mr. Gohel, what can you tell us about Abdul Aziz al-Muqrin? Is he the No. 1 -- or was he the No. 1 al Qaeda leader in Saudi Arabia?

M.J. GOHEL, ASIA PACIFIC FOUNDATION: Certainly. Al-Muqrin was one of the most dangerous characters, dangerous militants in Saudi Arabia. And one is not quite sure if it was, indeed, really him who has been killed. But one hopes so.

He is an individual who trained with al Qaeda in Khowst in Afghanistan, and then he went on to fight in Bosnia. He went to other places like Algeria. He was in Ethiopia.

And eventually, he was arrested in Egypt for being involved in a plot to kill Egyptian President Hosni Mubarak. He was extradited to Saudi Arabia. And this cold-blooded killer was then released early by Saudi...

WILLIAMS: I want to ask you about that. That‘s quite an interesting story. Because he was sentenced to something like eight years for trying to kill President Mubarak, but then they let him out early, supposedly because he showed great religious discipline, memorizing the Quran.

What does that say about Saudi attitudes toward the behavior at that time?

GOHEL: Well, I think there has always been a problem with the Saudi regime. There are—many of its members are sympathetic to the radicals, as odd as it may sound.

In fact, the interior minister, Prince Naif, has been interior minister for 30 years. The comment on the 9/11 atrocities, he said that this is the work of the Israelis and the Jews.

And even Crown Prince Abdullah, in a reference to the suicide bombings in Riyadh last year, said the same thing, that this is the work of Jews and Zionists.

Now this is coming from key members of the Saudi regime, and it‘s not surprising that they released a man like al-Muqrin, who then, of course, has gone on to kill a lot of other innocent people, including probably Mr. Paul Johnson.

WILLIAMS: Let me ask you both this question. Today, the Saudis say, ‘We get it. That we are doing a great deal now to crack down on terrorists in our country.”

Here is a statement made today by the Saudi spokesman a moment ago about how hard they were working to try to find Mr. Johnson and his killers.

(BEGIN VIDEO CLIP)

ADEL AL-JUBEIR, FOREIGN POLICY ADVISER TO THE SAUDI CROWN PRINCE:

Over 15,000 security personnel from Saudi Arabia were involved. Thousands of locations were searched and leads pursued. We did everything we could to find him, and we are deeply sorry that it was not enough.

(END VIDEO CLIP)

WILLIAMS: So the question for both of you, both and you General Downing, we‘ll start with you, General Downing. Are the Saudis now doing everything they can to protect Americans and find these terrorists?

DOWNING: Well, Pete, I think the Saudis are very, very concerned. The security situation, which has deteriorated so rapidly over the last 18 months, I think, imperils the royal family. So they‘re very, very concerned about their future and about the future of the country.

How serious are they? I think they‘re serious about trying to save the regime. How serious is the entire Saudi internal security organization? I think we have some indications that some of those people, as pointed out, are sympathetic with some of these Wahhabis and these al Qaeda adherents.

WILLIAMS: And yet, Mr. Gohel, does the very fact that, at least, U.S. officials confirm now that Mr. Al-Muqrin has been killed show that they are getting serious about this?

GOHEL: Well, forgive me for being a little bit skeptical about this killing of al-Muqrin. It‘s supposed to have happened within minutes of the news of Mr. Johnson‘s beheading, which has rather covered up the story of Mr. Johnson.

We don‘t know if it really is al-Muqrin. Let‘s hope it is. But let‘s go back to the Saudi regime. This is a regime which sponsored and funded the Taliban militia of Afghanistan, which was host to al Qaeda.

This is a regime which has funded extremist clerics, extremist mosques, a number of madrasses, religious schools, which are factories for producing new generations of extremist—of extremist radicals.

And recently, in Khobar, all the terrorists managed to escape except for one last year in Riyadh. A suburban house was surrounded and all 19 suspects managed to escape, even though the getaway car would not start.

And now either Saudi security is totally inept or incompetent, which I do not believe it is, because it protects the house of Saud very well. Or there is quite a massive collusion going on with the radicals.

WILLIAMS: All right, Mr. Gohel, General Downing. More questions for you and we‘ll get to those in just a moment, M.J. Gohel, General Wayne Downing, when we continue.

General, let me ask you this. The Saudis said today that one of the objectives of the terrorists is to drive Americans out of the kingdom, and that if companies pull up and leave, that would just play into the hands of terrorists. What should American companies do about their presence there?

DOWNING: Well, Pete, I think they‘re already doing it. They‘re going to slim down to absolute minimum essential in order to provide the services that they‘ve contracted with the Saudi government. And then they‘re going to get the rest of the people out of there.

Those that stay are going to get a lot of training on counter kidnapping, counter assassination tactics, and they‘re going to beef up security.

I think that is probably a good idea. Get the people out of there. The family members who are nothing but targets. And still continue to provide the support to the Saudis that they‘ve requested.

WILLIAMS: But you don‘t think all American should leave?

DOWNING: I don‘t think all of them should leave. I don‘t think all of them can leave, Pete. But let‘s get the nonessentials out of there.

WILLIAMS: Mr. Gohel, what does this tell us about al Qaeda in Saudi Arabia now? Are they so on the run that they‘ve stopped attacking large buildings? They‘re going after now just Westerners? Is it a sign of growing strength or are they backed into a corner?

GOHEL: I‘m sorry to say, Pete, that al Qaeda and the global Jihad movement is extremely strong, and it‘s able to kill at will, as it were. They‘re not on the run. Any kind of assessment that the terror movement has been rolled back or is on the run is highly optimistic.

They want to turn Saudi Arabia and Iraq into a battleground and then into cesspool where terrorism can be breed and new generations of terrorists can be created. What we are seeing in Saudi Arabia is extremely worrying, and I think the international community has to wake up to this fact.

WILLIAMS: All right. Well, thank you both very much. Sorry to end on that pessimistic note. General Wayne Downing and M.J. Gohel.

When we come back, Congressman Chris Shays of Connecticut says the Saudis are not doing enough in the war against al Qaeda.

WILLIAMS: This half hour on HARDBALL, Congressman Chris Shays on why he thinks the Saudi royal family has a long way to go in the fight against terrorism. Plus, an excerpt from the Chris Matthews exclusive interview with Ron Reagan, the son of President Reagan. But, first, the latest headlines, right now.

(NEWSBREAK)

WILLIAMS: Welcome back to HARDBALL. Congressman Chris Shays is a Connecticut Republican and member of the Select Committee on Homeland Security. Congressman Shays, what do today‘s events tell you? Are we demanding enough of the Saudis?

REP. CHRIS SHAYS ®, CONNECTICUT: Oh, I don‘t know if we‘re demanding enough. But it does tell me this, that the Saudi royal family is reaping what they sowed. They have allowed for years people to have contempt for Western ways and to condone things that are simply unacceptable. And now we see the fruit of their labor.

WILLIAMS: The former Ambassador Wyche Fowler said here just yesterday that he concedes that‘s the truth, but he says that they have turned the corner. Do you agree? Are they just way behind the curve? Or do they need to really step on the gas on that?

SHAYS: Well, they have a long way to go. They have educated generations of Saudi citizens to have contempt for Western lifestyles and the Western world. In spite of the fact that the royal family and so many wealthy Saudi citizens come here and enjoy the fruits of this country. So it‘s something that I think they understand now, and the question is, how hard are they going to work to overcome it?

WILLIAMS: And I guess another question is what should we be doing to persuade them? Are you satisfied that we are doing enough to persuade them to do more?

SHAYS: Oh, I think we are doing enough. The problem is they dug a ditch so deep, it is hard to climb out of it. I mean, this has been going on for generations. And it‘s very frightening. I mean, it is amazing to think what is happening to Westerners, particularly Americans, in a place like Saudi Arabia and the Middle East in general.

WILLIAMS: People commit horrible crimes here in the United States, too, but that doesn‘t mean that other Americans condone it. What is your sense, though? Do you think that there is more general support for this kind of crime among the so-called Arabs on the street in Saudi Arabia?

SHAYS: Well, let me put it this way. When we do terrible things, our citizens become outraged. And it would be, I think, encouraging to see some outrage on the part of everyday Saudi citizens. And if it is happening, we‘re not seeing it.

WILLIAMS: Is—on the question of the broader war on terror, does this change the equation at all? Is there anything we should now do differently?

SHAYS: Oh, I think that we just have to wake up to the fact. And this has been true for decades and decades. We‘ve been asleep to the terrorist threat. And we‘ve finally woken up. But we have a long way to go. I mean, there was contempt in the Middle East for the United States because they didn‘t think we had the moral fortitude to stick up for what we believe. They thought we were so decadent. I mean, there appears to have been debates within Osama bin Laden‘s group, pretty convinced that we wouldn‘t retaliate when they did what they did to the Twin Towers. That‘s kind of remarkable, isn‘t it?

WILLIAMS: Many American companies are now no doubt rethinking their policies about sending Americans to Saudi Arabia. This is the third American now killed in 10 days. What would be your recommendation to them?

SHAYS: Oh, well, they need us and we need them. They‘re two-thirds of the world‘s oil, two-thirds of what turns on our lights and what powers our machines and what gets our computers working. I mean, this is—we can say it‘s about oil, or we can say it‘s about the blood that makes the economy move. So this is a very important part of the world. And we need to be there, and we‘ll just need to make sure that our people are protected.

But it does make me want to say something about contractors. Whether they‘re contractors in Iraq or whether they‘re contractors in Saudi Arabia, anywhere in the Middle East.

These are brave people. These are people that know they are in danger, but they believe in what they‘re doing.

WILLIAMS: And I guess one question that their families will have is, is our government doing enough to protect them wherever they go? Is there only so much we can do in Saudi Arabia?

SHAYS: Well, regretfully there‘s very little we can do in Saudi Arabia. I mean, we have tried to get the Saudis to wake up to this terrorist threat and what was happening for years. So I do think they‘ve woken up. But waking up doesn‘t constitute turning a corner.

WILLIAMS: Congressman Shays, let me ask you about one other issue that‘s come in the news this week, and that is Iraq oil for food scandal. I know you‘ve been asking that this be investigated carefully. Are you satisfied at the progress of the investigation? Is it a serious one?

SHAYS: Well, first off, we‘re investigating. You have the International Relations Committee in the House. You have my Government Reform Committee, of which I‘m chairman. We have had hearings as well. We are pursuing it every waking day. What I think is extraordinary is that this story broke because of the free press in Iraq and the Iraqi Governing Council that leaked this information out; 200 names, many of them prominent people around the world and in the U.N.

I had a call from Kofi Annan. I had a call, obviously, from our ambassador saying they‘re treating it seriously. And we are going to be pushing the U.N., and we‘re working closely with the International Relations Committee.

We are not going to let this thing die. We‘re going to go full speed ahead.

WILLIAMS: When we come back, the officer who oversaw interrogations at Abu Ghraib prison testified that he was under, quote, “intense pressure” to get information out of the prisoners, but how high up the chain of command did that pressure go? “USA Today‘s” Tom Squitieri and John Fund of “The Wall Street Journal” will be here when HARDBALL returns.

(COMMERCIAL BREAK)

WILLIAMS: We‘re joined by Tom Squitieri, who is the national correspondent for “USA Today” and John Fund from “The Wall Street Journal.”

Gentlemen, let me ask you, as we step back just a little bit from what are now three killings of Americans in Saudi Arabia in the past 10 days, both the Bush administration and the John Kerry campaign are basically saying the same thing: We must be united in our resolve to find who is responsible and to destroy al Qaeda. But do these events change the political landscape in any way?

TOM SQUITIERI, “USA TODAY”: I think initially, Pete, they don‘t, because it just shows that President Bush is right in saying the war against terrorism continues and they‘re going to attack the people who want to bring democracy to the Middle East, that whole line of approach. But as the days go on and more Americans are killed, more allies are killed, and a huge country like Saudi Arabia starts veering towards major instability, that then become a political issue in the fall. Oil, a collapse of the government, perhaps, and then the question of Bush‘s leadership rises up.

WILLIAMS: John, is it that dire, do you think?

JOHN FUND, WALL STREET JOURNAL: No. I actually think this Abu Ghraib prison abuse scandal keeps getting pushed off of the front page, despite Tom‘s excellent story today, because we constantly have evidence of what the terrorists are all about. We also had this week the incredible calculations and, you know, Machiavellian genius of these terrorists and how they flew the planes into the World Trade Center.

So I think that as much as the Abu Ghraib prison abuse story continues to build, the fact of the terrorists engaging in these kind of activities tell Americans, this is who our enemy is. We‘re going to pay attention to that.

WILLIAMS: Well, you spoke of Tom‘s excellent story today. Let‘s talk about it. Tom, your story on the front page of “USA Today” says that an aide to Condoleezza Rice, the national security adviser, visited Abu Ghraib prison in November. What is the significance of that visit?

SQUITIERI: Well, first I want to say it was not just my story. It was a team of reporters at “USA Today.” We all worked hard on it. The significance of that visit underscores the fact that just weeks after President Bush put Condoleezza Rice in charge of Iraq, you may remember this furor in Rumsfeld‘s shop when he learned of this. He was petulant and would not have a press conference at a NATO summit because of it, that she was dispatching at least one of her people to sort of get a firsthand look at how successful the interrogation techniques were working in Iraq.

Now, this is after General Miller had gone out to sort of Gitmo-ize, as they said, the operation, to try to—to draw out and suck out and squeeze out as much intelligence.

So you have somebody in the White House sending one of their staffers to the prison, which even though they were not responsible for the abuses, of course, nevertheless it is a focal point of what is going wrong side of the equation in Iraq.

WILLIAMS: And there‘s no indication that this push for intelligence that you said led to the prison abuse, is there?

SQUITIERI: No. There isn‘t. And we were—I think we were pretty clear about that in the story.

However, the issue, when you step back, Pete, is when you set a tone,

we have to get the information. Go out and get that information. You can

· you have to, at the same time, remind constantly people that you have to do it in a way that‘s proper and legal and according to whatever conventions you‘re going to follow.

Now, when it starts here and it goes down to the end of the food chain, those messages aren‘t always delivered. But it‘s also the atmosphere that‘s present in the prison or anywhere else that can lead to these abuses.

WILLIAMS: Mr. Fund, I gather you think that not necessarily this story, but in general that the larger story is being overreported?

FUND: No. I think the Abu Ghraib prison abuse story is a real one. However, I think we need to put it into context. Part of it is the beheadings that we‘re seeing, what the terrorists are really all about. Part of it is the incredible pressure that American troops are under as they saw their comrades being blown up. So it doesn‘t excuse any of it, but I think we have to put in context, this is a dirty war. This is a war against an implacable foe that will use any method whatsoever to try to destroy our resolve. And I think the American people recognize, we have to bring these people justice at Abu Ghraib, but we also have to make sure that we don‘t flinch before these terrorists, because that‘s exactly what they want to do, drive us from the Middle East.

SQUITIERI: And Pete, I totally agree with John on that. I mean, the fact is that those people, some of those people in that prison and elsewhere did have information that was valuable, both to where, at that point where Saddam Hussein was hiding, to who may be funding the operations against the Americans and the allies. There was a possibility potential for good information in that prison. And if you talk to people, they say they did get some good information that was valuable. They won‘t say what for the obvious reasons.

But you know, so I don‘t disagree that there was information to be gotten. But there was intense pressure to get that information.

WILLIAMS: But is there any suggestion, Tom, as many—as some have said in the military, this was just a small group of people who were off on a tear on their own?

SQUITIERI: That suggestion has been made a lot, but if you look at the testimony that General Taguba has collected in sworn statements, it suggests that if they were doing this by themselves, it doesn‘t suggest that they were just doing it by themselves, that they were encouraged by others and feeling like they were doing the thing that they were being told or asked to do.

WILLIAMS: John?

FUND: Well, clearly, some of the worst abuses were done just because people wanted to humiliate these people. And I don‘t think it was really about extracting information. I think it was about sadism. I think some of the tone that Tom mentions, though, did precipitate some things which shouldn‘t have been done. So I think often what you saw in those pictures were the soldiers engaged in their own agenda late at night between 2:00 and 4:00 a.m. But a tone was set and it was wrong.

SQUITIERI: Pete...

WILLIAMS: Gentlemen...

SQUITIERI: ... I have one more quick thing. It‘s not what‘s it‘s in the pictures was getting information. It was other things that were going on to get information out of them that have not been fully documented yet.

Up next, will Ohio be this year‘s Florida in the presidential election between George Bush and John Kerry? MSNBC‘s Chris Jansing will be here with a report from Cleveland. You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

WILLIAMS: Welcome back to HARDBALL. Tonight, Ronald Prescott Reagan, the son of President Reagan, speaks out for the first time since his father‘s funeral in this exclusive interview with Chris Matthews on “Dateline NBC” at 8:00 Eastern time. Here is a preview of what you‘ll see tonight on “Dateline.”

(BEGIN VIDEO CLIP)

CHRIS MATTHEWS, HOST: You made a very profound statement at the gravesite, because you stopped and paused before you said it.

RON REAGAN, PRESIDENT REAGAN‘S SON: He came to believe that God had spared him in order that he might do good. But he accepted that as a responsibility, not a mandate. And there is a profound difference.

MATTHEWS: Do you want to explain that more?

REAGAN: The way he practiced his religion, the way I saw it, anyway, in term of his presidency and his public life, was that he was unabashed about it in the proper setting, in a church or whatever. He would be quite open about his feelings.

But he didn‘t use it, in a way. I mean, it was a very personal thing to him, and it wasn‘t, you know, a political chip that he was going to sort of use all the time. And you see that, I think, now. A lot of politicians will use their faith, such as it is, to gain political advantage, to appeal to a certain demographic in a narrow sense. There‘s a lot of—I think there‘s a lot of false piety floating around—floating around Washington.

MATTHEWS: You know, we‘re talking, Ron, about the events of that week. But of course, what people are struck by is the ending of your father‘s life. You were there.

REAGAN: Yes. Yes. It was beautiful and very peaceful. And my father always said that—he wrote my mother once, she was the first thing he wanted to see in the morning and the last thing—sorry. The last thing he ever wanted to see. And that‘s how it worked out.

MATTHEWS: Your mom was there. And...

REAGAN: Yeah, sure.

MATTHEWS: What happened at the end?

REAGAN: Well, he—he hadn‘t opened his eyes for about three days, I

guess. And—but literally, with his last breath, he opened his eyes and

· sorry. He looked at my mother. And then he was gone. It‘s, you know, it‘s a true story and it‘s a beautiful story. And it was such a wonderful gift for her. She had been talking to my sister earlier about, you know, maybe never seeing his eyes again. And...

MATTHEWS: Big question, last question. You‘re his son. You‘re Ron Reagan. What do you want the country and the world forever more to think of Ronald Reagan?

REAGAN: That he was a decent and kind man who did his best to live a good life as he understood it. History will take care of itself. He will be judged in a variety of different ways and a variety of diferent times. But those of us who knew him knew him as a good man. And if people remember him that way, I‘ll be satisfied.

(END VIDEO CLIP)

WILLIAMS: And you can see Chris‘s interview with Ron Reagan tonight on “Dateline NBC.”

Now on to HARDBALL‘s stock and trade politics. This election year, 18 states are considered toss-ups. The battleground states that could end up deciding who wins the White House.

MSNBC‘s Chris Jansing has been touring the battleground states. And tonight she joins us from Cleveland, the big state of Ohio—Chris.

CHRIS JANSING, MSNBC CORRESPONDENT: Thanks very much, Pete. Well, in the presidential sweepstakes, Ohio is a state so competitive, so coveted that the president‘s chief political adviser, Karl Rove, calls it ground zero. Each campaign has about 15 paid staffers on the ground. Thousands of volunteers have signed up, including two very determined women.

(BEGIN VIDEOTAPE)

REP. STEPHANIE TUBBS JONES (D), OHIO: I say George Bush, get a life.

JANSING (voice-over): Stephanie Tubbs Jones is a woman on a mission.

She represents Cleveland in Congress, and John Kerry to Cleveland.

JONES: Whenever I‘m out, I‘m campaigning, there‘s not a place that I don‘t go in my area, and I‘m going to take John Kerry with me.

JANSING: If Ohio is the ultimate battleground, the congresswoman may find herself in the title bout against Jo Ann Davidson.

JO ANN DAVIDSON, BUSH-CHENEY ‘94: The game plan for Ohio is to have a grassroots organization for President Bush in Ohio like no grassroots organization that you‘ve ever seen in the state before.

JANSING: Don‘t let her grandmotherly appearance fool you. Davidson is a political pitbull. A former speaker of the Ohio House, who is organizing arguably the most sophisticated ground game politics has ever seen.

DAVIDSON: We have precinct captains, we have neighborhood captains, we have county chairs, we have steering chairs, we have regional chairs.

JANSING: Quite simply, the Bush and Kerry campaigns are obsessed with Ohio. It‘s an obsession rooted first in centuries-old experience.

(on camera): How important is Ohio in any winning equation?

GOV. BOB TAFT ®, OHIO: No Republican has been elected president without carrying the state of Ohio in this—what, in about 100 years at least. So we‘re the key state. I don‘t see how the president can be reelected without carrying our state. It‘s that important.

JANSING (voice-over): And rooting, too, in the last election.

JENNIFER PALMIERI, KERRY CAMPAIGN: It has always been the answer to what, you know, what will you do different that Gore didn‘t do, so that you‘ll beat Bush? And the answer has always been, John Kerry will win Ohio.

JANSING: Call Ohio the Florida of 2004. The state has been GOP-friendly. Republicans hold every major office and have 50,000 more registered voters than Democrats. So on paper, things look good for the president.

Until you travel to Canton, Ohio, home of the Football Hall of Fame and Timken Steel, which is threatening to close, putting 1,300 workers on the unemployment line.

UNIDENTIFIED MALE: Darn right I‘m mad. Darn right.

JANSING: For more than 100 years, Timken met prosperity. The last three Republican presidents came here and Timken‘s CEO raised $600,000 for George Bush last year alone. Now, Timken is the poster child for a troubled economy in Ohio; 246,000 jobs lost under the Bush administration, most in manufacturing.

But Republicans point to places like (UNINTELLIGIBLE), 900 new jobs. Building kitchen cabinets needed for a booming housing market, fueled by low interest rates.

REP. STEVEN LATOURETTE ®, OHIO: What we should rather than focusing on the bad things that have happened, we should focus on the president‘s activities and policies that have brought us back and have turned this economy around and continue to do it.

JANSING: Which argument will win? Consider Ward 62 in Columbus. A bellwether district, where the presidential election last time came down to .2 percent. And where two neighbors recently lost their jobs.

(on camera): So what are you going to do in November?

UNIDENTIFIED FEMALE: I will vote for John Kerry.

UNIDENTIFIED MALE: Bush gets my vote.

JANSING (voice-over): Which brings us back to those ground war organizers, the former speaker and the congresswoman. Both can be very persuasive, and neither one intends to lose.

(on camera): You don‘t just want to beat John Kerry in November. You also want to beat...

DAVIDSON: Every day. On the grassroots, and every day to stay one step ahead of them in Ohio.

JONES: I guarantee you, by the time election time rolls around, Ohio will be ready for John Kerry.

(END VIDEOTAPE)

JANSING: The latest statewide polls have been fluctuating. John Kerry ahead in some; the president in others. Both campaigns say this is in their mind a statistical dead heat—Pete.

WILLIAMS: And Chris, what is their geographic strategy for changing it from a dead heat?

JANSING: Well, it‘s interesting. For example, I‘m on the banks of the Cuyahoga River in heavily Democratic Cleveland. In 2000, George Bush didn‘t get a single vote in six precincts in this city, so John Kerry knows he has to run up the margins very high in the urban areas—in Cleveland, in Cincinnati, in Toledo. Conversely, the president will be looking to win by big margins in the rural areas, in the suburbs and ex-urbs. All of them, of course, going for those swing voters—Pete.

WILLIAMS: All right, thank you. Our road warrior, Chris Jansing.

Join us again Monday night at 7:00 Eastern for more HARDBALL, and more of Chris Matthews‘ interview with Ron Reagan. Right now, it‘s time for the COUNTDOWN with Keith Olbermann.

END

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